SMTC Corporation, founded in 1985, is a mid-size provider of end-to-end electronics manufacturing services (EMS) including PCBA production, systems integration and comprehensive testing services, enclosure fabrication, as well as product design, sustaining engineering and supply chain management services. SMTC facilities span a broad footprint in the United States, Mexico, and China. SMTC services extend over the entire electronic product life cycle from the development and introduction of new products through to the growth, maturity and end-of-life phases. SMTC was recognized by Frost & Sullivan 2012 with the Global EMS Award for Product Quality, in 2013 for the North American Growth Leadership Award in the EMS industry, and 2016 for Customer Value Leadership Award.
SMTC is a public company incorporated in Delaware with its shares traded on the Nasdaq National Market System under the symbol SMTX.
Reports fourth quarter results of $60.7 million in revenue, $1.5 million in adjusted EBITDA, a net income of $0.8 million and $0.05 in EPS, compared to fourth quarter 2014 revenue of $57.0 million, $2.3 million in adjusted EBITDA, a net loss of $(2.4) million and $(0.15) in EPS.
Reports gross profit for the fourth quarter of $5.5 million or 9.1% compared to $3.8 million or 6.7% in the fourth quarter of 2014. Adjusted gross profit was $4.6 million or 7.6% in 2015 compared to $5.8 million or 10.2% in the fourth quarter of 2014.
Reports fiscal year 2015 results of $220.6 million in revenue, $5.7 million in adjusted EBITDA, a net loss of $(0.0) million and $(0.0) in EPS, compared to $228.6 million of revenue, $7.1 million in adjusted EBITDA, a net loss of $(3.9) million and $(0.24) in EPS in fiscal 2014.
Reports fiscal year gross profit of $17.7 million or 8.0%, compared to $19.0 million or 8.3% in the prior year. Adjusted gross profit was $17.1 million or 7.8% in 2015 compared to $20.8 million or 9.1% in the prior year.
Full year cash flow from operations was $10.9 million, up from $5.0 million in the prior year.
Debt, net of cash, was $10.4 million a decrease from $17.8 million year ended 2014.
Subsequent to year-end, an amendment was executed with our lender, PNC. The amendment resulted in $5.0 million of our revolving credit facility being converted into long-term debt for which the current portion is $1.0 million.
Revenue for the fourth quarter was $60.7 million. Gross profit was $5.5 million or 9.1% and adjusted EBITDA was $1.5 million. The 2015 fourth quarter results included $0.2 million in professional services related to the Company’s previously disclosed mergers and acquisitions activities and $0.2 million in additional severance charges not incurred in the fourth quarter of 2014. Adjusted gross profit was $4.6 million or 7.6% in the fourth quarter of 2015. Due to unfavorable market rates, realized foreign exchange losses included in gross profit on settled forward foreign exchange contracts was $1.3 million in the fourth quarter of 2015 compared to $0.2 million in the fourth quarter of 2014.
Revenue for the year was $220.6 million, or a 3.5% decrease from $228.6 million in 2014. Revenue from our largest customer in 2015 represented 13.4% of total revenue compared to our largest customer which represented 30.8% of total revenue in prior year. Revenue from our largest three customers in 2015 represented 33.3% of total revenue compared to the largest three customers which represented 53.2% of total revenue in prior year.
The gross profit percentage for 2015 was 8.0%, compared to 8.3% in the prior year, with some attrition due to new customer initial investment as well as higher realized foreign exchange losses of $3.3 million in 2015 compared to 2014. Adjusted gross profit percentage was 7.8% in 2015 compared to 9.1% in the prior year.
Pursuing the EMS Market
SMTC's goal is to become a strategic player in the EMS market. The long-term industry trends towards outsourced manufacturing continue to be positive. The worldwide electronics assembly forecast for 2013 to 2018 will strengthen and continue to show growth. The overall market demand for electronic products should remain stable throughout the forecast period as a result of continuous innovation throughout a variety of market segments. NVR expects overall market growth to remain reasonably healthy over the next five years.
The worldwide Market for Electronic Products by Market Segment 2013-2018.
Consumer, communications, and computer products will continue to be the leading segments driving the largest growth of the electronics industry. In 2018, the total industry is expected to exceed $1.7 trillion in annual assembly value (COGS), as consumption and replacement of electronic products continues and new products fuel demand. Outsourcing has become a critical element in keeping the electronics assembly industry expanding and driving costs to the margin each year a leading attribute in stimulating continuous consumer demand. The trend to move price-sensitive manufacturing to low-cost regions will impact the manufacturing footprint in the future market for all suppliers.
Global Electronics Manufacturing Services
SMTC specialize in low-mid volume/high-low mix electronics manufacturing services for the industrial & commercial, computing & networking, communication & instrumentation, consumer & high-tech electronics, medical & life science and power & energy markets. With manufacturing locations in United States of America, Mexico and Asia, SMTC provides highly engineered electronics and electromechanical assemblies for regional and global manufacturing companies. With a reputation for innovation and flexibility, SMTC provides every customer with personally tailored business solutions, global logistics and a competitive edge in the marketplace.
Our Global Footprint
Delivering Low Cost Global Production and Local Manufacturing Support
With locations in USA, Mexico and Asia, SMTC operates a global footprint, specializing in customized delivery of localized electronics manufacturing and engineering support.
Low Cost Global Production
Regardless of our customers location, SMTC is positioned to provide customers global competitiveness. We help customers determine where to manufacture and how to best capitalize on low-cost global geographies by leveraging in-country sourcing. With our global supply chain, we are able to source quality materials in region that can reduce our customers total cost of ownership.
Local Manufacturing Support
We have established NPI technology centers, value engineering services and manufacturing facilities in strategic locations maintaining a successful business partnership with our customers in most overseas markets.
Maintaining a strong global footprint requires thought leadership, the right-fit, responsive customer service and proper alignment with the customers business strategy. SMTC understands what it takes to deliver a pragmatic, continuous approach to successful global footprint manufacturing.
Low-Mid Volume/High-Mid Mix
Specializing in Low-Mid Volume, High-Mid Mix Electronics
SMTC specializes in the production of low-mid volume, high-mid mix electronics built for the industrial & commercial, computing & networking, communication & instrumentation, consumer & high-tech electronics, medical & life science and power & energy markets. While many companies specialize in high volume production, we have developed an entire global business process founded on the support of low-mid volumes high-mid mix complex devices. Across our global facilities, SMTC manufactures almost a 1,000 different products annually with volumes ranging from 1 to 20,000 pieces per month.
SMTC is sensitive to your electronics manufacturing needs, which enables us to build personal relationships with our partners. We ensure that communication takes place throughout the entire process. In order to deliver highly complex variable demand electronics devices to the industrial & commercial, computing & networking, communication & instrumentation, consumer & high-tech electronics, medical & life science and power & energy markets, SMTC is able to fully understand and produce exactly what our customers need and want, providing peace of mind and a strong sense of partnership.
Specialty End-to-end Solutions
Comprehensive Electronics Manufacturing Solutions
Most electronics manufacturers focus on printed circuit board assembly (PCBA). At SMTC we do that and more. As a global low-mid volume, high-mid mix electronics manufacturer, SMTC provides full suite of integration solutions to meet the needs of original equipment manufacturers (OEM's) in the industrial & commercial, computing & networking, communication & instrumentation, consumer & high-tech electronics, medical & life science and power & energy markets worldwide. In addition to extensive printed circuit board assembly and specialty wire cable harness assembly capabilities, SMTC provides highly engineered end-to-end solutions through full system assembly and box build services.
While SMTC provides prototyping, front-end engineering and design solutions, our extensive test development capabilities range from industry standards to comprehensive, custom highly engineered systems. Through a comprehensive end-of-life component system, we maximize the cost of ownership and provide fulfillment and after-market services in order to help manage your supply chain needs.
And if that isn't enough, every day SMTC's experts from our facilities located around the world, work on hundreds of new products in different stages of the engineering and design. While other electronics manufacturers outsource engineering and design services or confine them to individual departments, we embed them into our entire proprietary New Product Introduction (NPI) process, which is covered by our global ISO9001and ISO13485 accreditations.
One size does not fit all. At SMTC we take the time and care to understand customer products and needs in order to deliver the best possible end-to-end solutions.